BY: AAKANKSHA ANAND ABHA CHAUDHARY ARPIT BATRA SUNALI JOSHI

INTRODUCTION

Dell was founded in 1984 by Micheal Dell, in Texas. From the time of its inception the company adopted the direct sales model. From a company that started in a dorm room selling 100 computers, it has now become a company with revenue $63.07 billion.

Started as a PC company. It also manufactures: o Servers o Data storage devices o Network switches o Software o Peripherals

In 2003 changed its name from Dell Computer Company to Dell Inc.

SUBSIDIARIES: Alienware, Dell Services,Force10, SonicWall, WYSE,SecureWorks, KACE Networks, Exanet,Compellent, AppAssure Software, Quest Software,Make Technologies

SUPPLY CHAIN
Dells success is a combination of:

Direct Sales
Build-to-order Supplier Integration

Together these allow for maximum effectiveness with minimum cost

The supply chain of Dell includes: The customer Dells website Dell assembly plant Dells suppliers Their suppliers

Process cycle of Dell

Customer order and Manufacturing cycle is A pull process. Procurement cycle is A push process.

Direct sales
A direct sales system allows Dell to: Cut costs Build relationships with its customers Deliver exactly what the customer wants

SUPPLIERS

DELL

CUSTOMERS

Build to order
A build to order system allows Dell to: Increase inventory velocity

Minimize inventory costs

Build exactly the computer that its customers want

Minimize the need for forecasting

Supplier Integration
Supplier integration allows Dell to maximize the benefit of its other core competencies Here is how they do it: Location of supplier warehouses Extranet Meetings with suppliers

Push Pull Supply Chain

Dell has a push-pull supply chain. It has reduced costs and lead time by keeping the push-pull boundary just before the assembly. The final assembly is done after the customer order is received.

Competitors Disadvantages vis--vis Dell

Need to hold inventory at each step in value chain . Have to pay suppliers first before getting paid from customers . Caught with short supplies of hot products- lost sales. Stuck with excess inventories of slow selling products . With about 2,000 product transitions a year, the ability to reduce product time to market is critical.

Dells Competitive Advantages

Dell is having one of the best SCM in the world.

90% supplies ordered online using integrated websites of supplier and Dell (B2B).
95% of suppliers situated very close to assembly plant hence coordination is easier. Dells factories have only 7 hrs worth of inventory for most items whereas industry wise it is around 10 days. 15 suppliers provide almost 85% of all supplies. Dell gets paid by customers and then pays to its suppliers.

Demand Forecasting at Dell

Product variety

Dell has recognized the right product variety to be offered to the customers. It dose not offer a wide range of modems and software. The overall number of configurations offered by the company are high. Thus a fixed set of options can cover most of customer needs.

Dell chose i2 Technologies for its SCM system. i2 serves almost 70% of the SCM market. Instead of forecasting the daily supply needed, Dell receives the exact material every two hours to fulfill actual customer orders.

High customer retention

This is possible because the company has a strong relationship with the customer. This a measure of SC efficiency. Dell offers custom feats and low cost computers. The lead times being reduced helps in speedy delivery This makes it difficult for a customer to switch to another brand.

Business to business benefits

Dells establishment of private e-marketplace and use of internet to improve sc collaboration by providing the demand and production data to suppliers. Thus can outsource imp parts of business bt still keep control over what it produces.

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